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Tax Credits Available for Employers Who Offer Employee Leave for Certain COVID-19 Related Reasons

Under the American Rescue Plan Act (ARPA), signed into law in March by President Biden, certain employers may be eligible for tax credits if they voluntarily extend Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave (EFMLA) from April 1, 2021, to Sept. 30, 2021.

Small and midsize business owners may claim the wages they paid for EPSL and EFMLA as a credit against their employer contributions for social security and FICA taxes. Businesses can take dollar-for-dollar tax credits equal to wages of up to $5,000.


Employees may take paid sick leave through the EPSL or EFMLA for one of the following reasons related to the COVID-19 pandemic:

  1. The employee is experiencing COVID-19 symptoms and is awaiting diagnosis.
  2. A healthcare professional advised the employee to self-quarantine.
  3. The employee is required to conform to a government quarantine or isolation order.
  4. The employee is caring for an individual who is required or has been advised to quarantine by a medical professional.
  5. The employee is caring for their son or daughter who is required or who has been advised to quarantine by a medical professional.
  6. The employee is missing work because he or she is awaiting the results of a diagnostic test.
  7. The employee is absent from work because he or she is obtaining a COVID-19 immunization.
  8. The employee is recovering from illness, disability, injury, or condition related to a COVID-19 immunization.

Help is available

The attorneys at O’Reilly Rancilio are ready to answer your questions regarding COVID-19 and the law. Business owners or municipalities with questions regarding the ARPA, EPSL, EFMLA tax credits should call 586-726-1000 or visit

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